NiMin Energy (fka NEYYF)

[swanlinbar]

Anotherone from ed,Half The Oil We Need By 2020 Still Needs To Be Found
Mar. 19 2011 By ROBERT LENZNER

We’re going to need 126 million barrels of oil a day by the end of the next 2 decades– up from the current 90 barrels a day the global economy requires currently. And half that additional 36 million barrel a day increase has “still to be developed– or even found, according to the Schlumberger Ltd. 2011 annual report. I’d read this report as a primer of the challenge to find and produce the oil and gas the world will need in the future.

“There is no question that oil and natural gas will still be the major source of the world’s energy supply for decades to come,” say Schlumberger. Maybe it’s self-serving, but its true.

So, look for energy resources to be coming from offshore Greenland, central Sub-Saharan Africa, Brazil, the North Sea, North Africa, Southeast Asia, Eastern and Western Siberia and the Caspian says Schlumberger. Meaning to me that reserves in North America, the US and Canada, are worth a premium. They are nearby and they are safely ours. It will require renewed deep sea drilling and exploration though. Half of all new oil and gas fields discovered have been offshore– a ttrend that is likely to continue.

As Schlumberger says; “To find oil, you have to drill. But not only do you have to drill, you also have to increase the intensity at which you drill–in terms of technological sophistication, well and reservoir complexity, and operational efficiency and effectiveness.”

The reason why the market for drilling services– Schlumberger’s business- has trebled in the past 10 years and will continue to experience similar growth in the future. One major reason Schlumberger stock has outperformed the S&P 500 index and the Philadelphia Oil Service Index(OSX) the past 5 years. Be aware the stock sells at 20 times earnings, the multiple for the prime oil services stock in the world.

Id be more inclined to own the Vanguard Energy Fund(VGENX), which is heavily weighted in the be st North American producers, Exxon Mobil, Occidental Petroleum, Canadian Natural Resources, and Suncor Energy.

Take Canadian Natural Resources, for example. It has 30 years of known reserves, not 7-10 years as some other companies have. If natural gas prices are bottoming and heading back up, CNQ will be a solid addition to your portfolio.

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Better yet, take NiMin Energy, it has > 70 years of "known" (2P) reserves, 28M bbls. / 365K bbls. of annual production.

Note that we are not hearing about any huge drilling campaign being undertaken by the Saudies during this boom, contrary to what happened in the last one. The fruits of that labor were sown right around when the bust came, and between late '08 and '09 Saudi Arabia brought on new production capacity of something like 1.7 mmbopd. It is mainly due to that activity that the world has been able to absorb the cessation of nearly all of Libya's 1.8 mmbopd without oil prices going really idiotic.

The obvious question is, why aren't the Saudies ramping up drilling this time? Is it because they have no cash for that after funding all the "welfare" type payments their king has ordered, lack of economic projects, or some combination thereof?